ITV

Category: Cable TV

  • NXTDIGITAL reports total income of Rs 938.68 cr for 9 months ended 31 Dec

    NXTDIGITAL reports total income of Rs 938.68 cr for 9 months ended 31 Dec

    MUMBAI: NXTDIGITAL Ltd on Monday reported its financial results for the third quarter and nine months ended 31 December 2019. On a consolidated basis, the company reported a total income of Rs 938.68 crore for the nine months ended 31 December, 2019 as against a total income of Rs 527.36 crore for the corresponding period of the previous year recording a growth of close to 78 per cent.

    For the same period, the company reported a Profit After Tax of Rs 100.10 crore as against a loss of Rs 344.04 crore for the corresponding period of the previous year. The company reported a consolidated net profit after tax of Rs 33.63 crore for the quarter as against a net loss after tax of Rs 122.84 crore for the quarter ended December 31, 2018.

    The company claims that the main growth driver has been the smart turnaround of the media business of the company carried out through its significant subsidiary IndusInd Media & Communications Limited (“IMCL”). IMCL is one of India’s leading digital content distribution companies, delivering digital content via cable as well as through satellite on its Headend-In-The-Sky (HITS) platform – through a vast network of established Local Cable Operators.

    IMCL continues to set the trend for innovation, driven by its superior HITS technology that delivers nearly 700 television services to consumers in the most remote regions across India; irrespective of the weather or terrain.

    “The vision and mission of the government viz. ‘Digital India’, ‘Skill India’ and ‘Make in India’ is embodied in our principles for success. We are proud to partner with over 50,000 individuals comprising Local Cable Operators and their teams across India – who are well trained and skilled in digital service delivery; whilst employing world-class yet native technology at our partners premises. This remains a significant edge in our endeavor to perform.”  IMCL chief executive officer Vynsley Fernandes says.

    Recently, several multi-system operators (MSOs), including one of India’s biggest has signed up for managed services via IMCL’s HITS platform – in semi-urban and rural markets. To support the MSO’s regional requirements, IMCL is augmenting its satellite capacity that will allow it to carry a greater number of regional channels. “Our HITS platform was designed specifically to help MSOs and LCOs deliver services across India seamlessly; with excellent uptimes and a high quality of service, through significant investments in technology. This will encourage infrastructure sharing – to ultimately bring down cost of operations and ensure customers across the country benefit from the quality of service, the choice of channels and the effective delivery pricing,” says Fernandes.

    On the satellite front, IMCL continues to remain the leader in innovation. After being the first satellite platform in the world to adopt and implement 16APSK modulation in 2016 – which ensures a higher throughput and optimal use of satellite capacity; IMCL is currently implementing the next generation 32APSK technology; cementing its leadership position globally, in technology lead.

    IMCL has recorded profits consistently over the last four quarters driven by its focused business strategy of growth in size – in the smaller towns and villages; and growth in ARPU through value added services and other offerings in the metro towns and cities. Consumer viewership experience and quality of service continue to drive IMCL’s business strategy as is evidenced by the very low customer churn ratio and pre-paid collection percentages at close to 100% per cent.

  • Cable Operators Welfare Federation counters IBF’s comments regarding NCF and NTO 2.0

    Cable Operators Welfare Federation counters IBF’s comments regarding NCF and NTO 2.0

    MUMBAI: The Cable Operators Welfare Federation (COWF) has countered the IBF’s claims regarding NCF. The IBF had said that by keeping NCF at Rs 160, distributors could charge for something that DD Free Dish is giving out free.

    COWF said that DD Free Dish is run on taxpayers’ money and channels pay a hefty sum to get a slot on it which they recover through ad rev.

    In a letter, the COWF has said that since the advent of the TV business, broadcasters have been portraying the LCO community in poor light as “cheaters/goons who never declared proper numbers”.

    The letter states, “This is perhaps a rare industry where a major stakeholder blames its distributors whenever things do not go their way. Once commercial terms are achieved, things go back to normal.” It goes on to say that broadcasters are also guilty of showing inflated declarations such as reach in order to gain advertisement tariff.

    Over the years, cable operators have constantly kept abreast of all the latest technologies. MSOs and LCOs also run a business and need to recover costs, just as broadcasters, the letter goes on to mention.

    “On the NCF, our observation in the past year is that its calculation is cumbersome and many customers still do not understand it and it takes a lot of our time explaining to customers how we have billed them. Hence we had suggested that a higher limit be set up for a fixed NCF for SD channels and HD channels, just as broadcasters were permitted a higher cap of Rs 19 per month, which will give us the freedom to charge as per different market scenarios and as per our ROW needs,” the letter states.

    It even mentions that LCOs have tried to limit the rate increase by passing on benefits to customers. Some smaller MSOs have passed on the benefits to LCOs. Many MSOs have several channels in the FTA pack because they earn from carriage, marketing and placement fees, the letter adds.

    In the end, the COWF requests the broadcaster community to work together. “We are open to discuss all means by which we can reduce NCF on a mutual basis as long as you can find ways to ensure that our revenues are protected,” it says.

  • Hathway back on growth trajectory, reports consolidated profit of Rs 68 cr in Q3

    Hathway back on growth trajectory, reports consolidated profit of Rs 68 cr in Q3

    MUMBAI: After facing consecutive losses, Hathway Cable and Datacom has reported a consolidated profit of Rs 68.18 crore in the third quarter of the financial year 2019-20. The multi-system operator (MSO) had posted consolidated loss of Rs 57.87 crore in the corresponding quarter of the last financial year.

    The cable network improved his revenue from operations by 12.3 per cent to Rs 450.82 crore in Q3 of FY20 as compared to Rs 401.43 crore in a corresponding quarter of last year.

    Whereas, the consolidated total income for the December-ended quarter rose by 23.2 per cent to Rs 512.61 crore compared to Rs 416.07 crore in the corresponding quarter of the last financial year.

    The company reported consolidated EBITDA of Rs 128.8 crore up by 52 per cent against Rs 84.5 crore in the corresponding quarter last financial year. Meanwhile, the EBITDA margin grew by 29 per cent against 8 per cent in the same quarter of FY19.

    In the segment revenue, the broadband business grew by 2.8 per cent to Rs 143.2 crore and cable television grew by 15.4 per cent to Rs 307.62 crore in the December-ended quarter of FY20.

    The subscription revenue grew by 18 per cent to 354.8 crore against Rs 300.8 cr whereas activation revenue shrunk by 8 per cent to Rs 14.7 crore compared to Rs 16 crore and placement revenue also slumped by 6 per cent to Rs 74.7 crore versus Rs 79.1 crore in Q3 last financial year.

  • Den Networks reports profitable Q3 2020

    Den Networks reports profitable Q3 2020

    BENGALURU: Indian cable network and broadband company Den Networks Ltd (Den) reported consolidated profit after tax (PAT) of Rs 12.28 crore for the quarter ended 31 December 2019 (Q3 2020, quarter or period under review) as compared to a loss of Rs 31.21 crore for the corresponding year ago quarter (Q3 2019, y-o-y) and 28.9 per cent higher than the Rs 9.53 crore for the immediate trailing quarter (Q2 2020, q-o-q). Consolidated EBITDA for the quarter at Rs 58.28 crore was 21.2 per cent higher y-o-y than Rs 48.1 crore and was 20.1 per cent higher q-o-q than Rs 48.51 crore.

    Den reported consolidated operating revenue of Rs 318.08 crore, which was 3.1 per cent higher y-o-y, but was 4.3 per cent lower q-o-q than Rs 332.42 crore.

    Segment revenue

    The company has two segments – Cable Distribution Network (Cable) and Broadband.

    Cable revenue increased 3 per cent y-o-y in the quarter under review to Rs 300.46 crore from Rs 291.59 crore, but declined 4.6 per cent q-o-q from Rs 314.92 crore. Cable segment operating result for Q3 2020 was 6.23 crore as compared to a loss of Rs 8.95 crore for Q3 2019 and a loss of Rs 21.14 crore for the immediate trailing quarter.

    Major revenue heads for the Cable business are Subscription, Placement, Other operating income and Activation. Cable Subscription revenue in Q3 2020 increased 10 per cent y-o-y to Rs 189 crore from Rs 172 crore and increased 6 per cent q-o-q from Rs 178 crore. Placement revenue increased 8 per cent y-o-y to Rs 87 crore from Rs 81 crore but declined 1 per cent q-o-q to Rs 88 crore. Other operating income in Q3 2020 declined 52 per cent y-o-y to Rs 6 crore from Rs 13 crore and declined 68 per cent q-o-q from Rs 19 crore. Activation revenue declined 29 per cent y-o-y to Rs 18 crore from Rs 25 crore and declined 39 per cent q-o-q from Rs 29 crore.

    Broadband revenue increased 4.7 per cent y-o-y in Q3 2020 to Rs 17.62 crore from Rs 16.82 crore and increased 0.7 per cent q-o-q from Rs 17.50 crore. The segment reported a lower operating loss result for Q3 2020 at Rs 5.4 crore and a loss of Rs 6.6 crore for Q3 2019 and a loss of Rs 5.1 crore for Q2 2020.

    Let us look at the other results posted by Den for Q3 2020

    Consolidated total expenses for Q3 2020 at Rs 321.63 crore was 4.8 per cent lower y-o-y than Rs 337.84 crore and was 11.9 per cent q-o-q lower than Rs 365.27 crore. Consolidated content costs in Q3 2020 declined 4.7 per cent y-o-y to Rs 141.60 crore from Rs 148.65 crore and was 11.2 per cent lower q-o-q than Rs 159.45 crore.

    Consolidated placement fees at Rs 1.08 crore during the quarter under review was 89.2 per cent lower y-o-y than Rs 9.99 crore and was 76.2 per cent lower q-o-q than Rs 4.54 crore. Consolidated employee benefits expense for Q3 2020 at Rs 23.72 crore was almost flat (down 0.3 per cent y-o-y and down 0.2 per cent q-o-q) than Rs 23.8 crore in Q3 2019 and Rs 23.8 crore in Q2 2020.

    Consolidated finance costs during the quarter decreased 9.7 per cent y-o-y to Rs 4.38 crore from Rs 13.88 crore and declined 30.6 per cent q-o-q from Rs 6.31 crore. Consolidated other expenses in Q3 2020 increased 19.9 per cent y-o-y to Rs 93.39 crore from Rs 77.87 crore but declined 2.9 per cent q-o-q from Rs 96.15 crore.

  • MSOs on distribution challenges post NTO

    MSOs on distribution challenges post NTO

    MUMBAI: The internet has given choice to consumers to select packages and watch content of their choice. A rapid increase in the viewership on mobile and OTT platforms on a daily basis has become a threat to the DTH and cable distribution ecosystem. Apart from the internet, competing with broadband services and OTT is another challenge post NTO. The experts from the broadband and cable industry gathered at Video and Broadband Summit (VBS) 2019 in December, organised by Indiantelevision.com to discuss innovative measures taken by companies to stay ahead of the curve. 

    The Remediation Company founder & partner Shyamala Venkatachalam, moderated the panel discussion on 'The Distribution Challenge' at VBS 2019. The panelists Den Networks Ltd CEO SN Sharma, Kerala Communicators Cable Ltd. (KCCL) ex-CEO and SCTE India GC member Shaji Mathews, Metro Cast Network India Pvt Ltd promoter Nagesh Narayandas Chhabria, Tata Sky Ltd chief financial officer G Sambasivan, SITI Networks Ltd chief executive officer Anil Malhotra and Fastway Transmissions Pvt Ltd consultant (strategic planning) Peeush Mahajan shared their views on how distribution companies are innovating to stay ahead of the curve. They also briefed the audiences on the measures adopted to counter relentless disruption.  

    "Technology is unstoppable and customer is the king. As lot of innovations keep on happening, the business has to adapt the changes and has to focus on two things – customer viewing experience and customer service. For making viewing experience the best, we are investing very heavily on our backend and the distribution pipeline and will be increasing the bandwidth capacity manifold,” said Sharma.

    He further continued, “In India, after a lot of HD channels were launched, still only 20 per cent of subscribers are using the HD platform. As we have taken a conscious decision to only deal with HD boxes from the new year, we will ensure that HD content will be available for every subscriber. Even if consumers are not willing to subscribe for HD channels because of the higher subscription amount, we will ensure that the consumer gets the SD service which will be as good as HD experience.”

    "The movement from SD to HD has been much below the consumer’s expectations. The movement to OTT and hybrid boxes has happened over a period of time. As today the content is produced in HD or even higher than that in 4K, lot of MSOs are setting up HEVC transmission and they will also be introducing boxes with capacity of higher than higher definition. The process has to be gradual, which also depends on the willingness of the players to invest in the business," said Mathews. 

    On the issue of interoperability of STB, he said that the concept of comparing the STP with a mobile phone is not right, as the STB is a sim card and not the mobile phone. So, the whole concept needs to be overlooked.

    The challenge for MSOs is that it is not viable for them to go to village areas and give connections to around 200 – 300 houses. “The main concern now is that 15 – 20 per cent of our existing customers are not coming back to us post NTO. This is because of the communication gap between the LCO and the customers. To bridge this gap we have to educate the LCO by training them. Also communicating through social media, direct marketing or door to door marketing is an option to convince customers,"  said Chhabria.

    He also said, “MSOs should get their existing customer base back, which is around 15 – 20 per cent. The NTO model has been stabilised and people can now invest. Two years ago it was a non-viable business, but now we can show the investors that it is a viable business and ask them to invest as there is an opportunity to earn money.”

    Sambasivan shared his view on distribution challenges. He said that as per the India projection report, OTT is growing very fast and the number of hours of video consumption is going up. DTH and cable industry need to be worried as 90 per cent consumption is on mobile. But OTT is not an immediate threat to the DTH and the cable industry because along with OTT, consumers are also watching television. The viewership on television in the last five years has not decreased. OTT may be a threat after around ten years.

    Throwing some light on the post NTO challenges faced by the industry, Malhotra said that we are facing two challenges, first is two competitions. The first competition we are facing from broadband services, which is a linear way of giving signals compared to STBs. To provide SD, HD or 4K content we need to provide STBs which will decode the signal and provide content in the respective definitions. The second competition from OTT is device agnostic because in the broadband, whether it’s 4K, HD or SD, all signals are distributed similarly. The quality bandwidth decides what kind of viewership experience a customer has.

    “The second challenge is that suddenly there are internet users in the country. As per TRAI’s published data, 64 crore is half of the population of India. This population buys smartphones and we do not know how much of this population has moved away from linear TV to internet. From a content perspective, the kind of content which is popular is the adult site and is popular on OTT platform and not allowed to be beamed on the linear TV. The unfair competition will be that if the customer demands a personalised content, which is viewable on the OTT platform, but not viewable on the linear video platform despite having user enabled features on the device. Also the password sharing piracy is a challenge as more than one person can view the same content on different devices. So, overall technological aspects have to be considered,” he said.

    Sharma added that the message for MIB is that piracy is one of the issues which need to be addressed as lot of investments have been done at the state level for implementing NTO. DOT, few years back had addressed the issue by appointing state level cells. The other issue is the linkage of a la carte price with the bouquet price.

    Mahajan thanked TRAI for implementing a la carte and said that TRAI has given a choice to the customers. In 2018, 98-99 per cent of the customers were on suggestive bouquets offered MSOs and DPOs. In last 8-9 months, a big migration has happened from 2-22 per cent from bouquet to a la carte and it keeps on happening on a daily basis. We have to put in more efforts to educate the subscribers and train the LCOs, as LCOs are the key people who can generate a need for a la carte. DPOs have put in a lot of effort and will continue in future also. By the end of 2020, 35-40 per cent consumers should move on a la carte.

    Malhotra said that as per the regulations, TRAI has done a perfect thing by giving a choice to the customers. Unfortunately, the customer needs a la carte along with a package of their suitability. It is very difficult for a customer to choose between 800 channels and make a package of its own. But packaging is important and there are three ways of doing it. Packaging happens at a broadcaster level and if the customer wants the broadcaster package, then the distributor cannot dismantle the package.

  • LCOs and new tariff order challenges

    LCOs and new tariff order challenges

    MUMBAI: With the evolution of television, cable industry has gone through various challenges from competing with DTH operators to digitisation to NTO. Although implementation of NTO was the biggest challenge for the cable industry, it managed to overcome all the challenges they came across. Going ahead LCOs are also gearing up for challenges with OTT apps with its Hybrid boxes. The industry experts gathered to discuss how has the role of the LCO changed under the new regulatory framework and its significance going forward at VBS 2019.

    Video and Broadband Summit 2019 orgainised by Indiantelevision.com on11 December gave the platform to the DPOs, MCOs and LCOs to discuss the issues faced by them. One of the panel discussions of VBS 2019 highlighted the role of LCOs post NTO where the experts discussed the impact of NTO on cable industry, technical challenges they came across, customer churns in the transition period of NTO, and importance of educating LCOs on bouquets and a la carte prices. 

    The panel was moderated by One Take Media co-founder and chief executive officer Anil Khera. On the panel were IndusInd Media & Communication Ltd. chief operating officer N K Rouse; ABS Group of Companies MD & chairman Atul Banwarila Saraf; Maharashtra Cable Operators Federation (MCOF) president Arvind Ramesh Prabhoo; UCN Cable Network Pvt Ltd head – operations Debashis Mohanty and Ashwini Cable Santosh Yadav. 

    Khera set the tone of the discussion by briefing the audiences on the challenges faced by LCOs till date and how they have overcome all those challenges successfully. NTO was the biggest challenge for the industry, Rouse explained that the new NTO, for his company was not a new tariff order, but was a new technical order and his company had to face lot of technical challenges to implement the new NTO. 

    “In the initial stage there was a lot of confusion. With the top five broadcasters, for 335 bouquets or packs, we have more pay channels and DPO packs. Customers were confused as they were not sure what to select. We had challenges in convincing the customers as everything was new. But as things settled down, the viewership pattern had changed with lots of ups and downs but still packages keep coming and going,” he said. 

    “There was a saying that content is the king and distribution is the God. The time has come that content remains the king, but God has changed. Now customer chooses the God. We all have to come and work together and ensure that we take care of the customer’schoice. Challenges will keep coming and there will be amendments in NTO, but things will settle down. I look forward for collaboration with the stakeholders and I am sure things will turn positive,” he opined.

    There has been 15 to 20 per cent of customer churn in the transition period of NTO. Saraf said in the last six to eight months, he has observed that people in small towns are still using TV and there is a trend of using two or three TVs in one house. To get these customers back, LCO needs to be educated, but MSOs are not able to educate these customers as the customers themselves are not ready to educate themselves.

    Saraf also said, “Though operators and MSOs like us are not much happy post NTO, we are able to compete with big MSOs at the same cost. We do not deny entry to the new areas as our preposition of expansion is different and we can expand our business.” He further added that there are lots of things which small MSOs can build among their LCOs, as compared to big MSOs. For big MSOs, it is difficult to control 10 – 15 thousand of LCOs. A limited number of LCOs can be controlled and good business can be built post NTO.

    Prabhoo believes that transformation has already started but is unaware of how much the MSOs are assisting FTH with the transformation. He added that the network is operated and owned by the last mile owner and it will be the responsibility of the last mile owner to upgrade the network.

    The panellists also agreed that they have to make sure to reach platforms like Netflix or Amazon and for that LMOs have to immediately upgrade to DTHs and then MSOs will be able to help them to launch a wide OTT platform. Once this happens, cable networking can be similar to that of an OTT platform.

    Mohanty said, “As per the customer’s perspective, there is a demand for content. Customers will return to MSOs, if MSOs come up with OTT content and provide a number of services as per the customer’s choice. Most of the time, LCOs have 50 per cent digital connection, so they have enough manpower to upgrade their network. Once MSOs upgrade their network, it can provide services as per the customer’s demand.”

    He also informed that they have started hybrid boxes. Once the hybrid boxes are installed at the customer’s place, customers can view both offline and online content.

    Saraf said that five years back the market was not up with the hybrid boxes and LCOs were not ready toinvest in it. Now from last 2 – 3 years we have OTT platforms and hybrid boxes. Now FTTH will create something which will influence the customers and LCOs to invest in hybrid boxes.

    Yadav replied to Khera’s question of cable collaborating with broadband, “NTO implementation has been big for the LCOs and there has been increase in the operating cost of the LCO. So LCO has to provide additional services like broadband. LCO can tie up with the MSOs and go ahead with the existing costumers. I believe that all LCOs do not have their 100 per cent base and so they already have chosen for their cableservices. They can advertise and can assure that they can provide good services by upgrading their infrastructure.”

    On NTO Prabhoo commented, “I am not sure if the NTO’s image’s in true spirit has been implemented or not or if the customers have understood that what NTO has started to provide them. During the pre-digitisation era the NTO was under declaration by the LMOs. When digitisation came in, each and every set-up box was accounted with LMOs and with MSOs. He said he is unaware if broadcasters benefited from that. But in the post NTO there has been 15 to 20 per cent drop in the subscriber base, but ARPU has increased in a particular rate.”

    Rouse commented, “When NTO was implemented few broadcasters thought that there will be a drop in the base. There was a massive fall from DTH or videos but I am sure we could retain some customers. More transparency is required as customers have made a choice, for which some laws have to be implemented.” 

  • TiVo to merge with Xperi Corp

    TiVo to merge with Xperi Corp

    MUMBAI: Late last week, Xperi Corp  and TiVo Corp announced that they have entered into a definitive agreement to combine in an all-stock transaction, representing approximately $3 billion of combined enterprise value. The transaction creates a leading consumer and entertainment technology business and one of the industry’s largest intellectual property (IP) licensing platforms with a diverse portfolio of entertainment and semiconductor intellectual property.

    The merger agreement provides for a 0.455 fixed exchange ratio, which implies a 15 per cent  premium to TiVo’s shareholders based on each of Xperi’s and TiVo’s 90-day volume-weighted average share prices. At close, Xperi shareholders will own approximately 46.5 per cent  of the combined business, and TiVo shareholders will own approximately 53.5 per cent.

    The deal is expected to close during the second quarter of 2020, subject to regulatory approvals, the approval by the shareholders of each company, and other customary closing conditions.

    Compelling Benefits of Combining Two Innovative Product and IP Licensing Leaders

    This transaction combines two technology pioneers who have shaped how millions of consumers access and experience entertainment content, and whose innovations are found in billions of devices around the world. Serving hundreds of businesses ranging from content providers to consumer electronics and automotive manufacturers, the combined entity will provide an amazing entertainment platform for tens of millions of individual consumers and create a powerful platform for the discovery, delivery, and monetization of content.

    The volume of entertainment content has exploded, with more ways than ever before to access it. TiVo’s leading content aggregation, discovery, and recommendation capabilities enable viewers to more easily find, watch, and enjoy entertainment. When coupled with Xperi’s strong presence and product capabilities in the home, automotive, and mobile device ecosystems, the combined company will have a unique industry platform to address an ever-increasing consumer desire to enjoy entertainment anywhere, anytime, on any device.

    Additionally, the combination will create an intellectual property licensing platform that spans a number of the largest addressable markets in entertainment content, consumer electronics, and semiconductors. With more than 10,000 patents and applications between the two companies and minimal licensee overlap, the combined IP business will be one of the largest licensing companies in the world. Further, the combined business will benefit from greater research and development capabilities, as well as customer diversification.

    “This landmark combination brings together two highly complementary companies poised to set the industry standard for user experiences across the digital value chain,” said Xperi CEO Jon Kirchner. “Together, we will be able to integrate TiVo’s leading content aggregation, metadata, discovery, and recommendation capabilities with our home, automotive, and mobile technology solutions to help our customers create experiences that excite and delight consumers. Additionally, the combined company will continue to unlock the value of our strategic and sizable patent portfolios by bringing together our deep industry expertise and powerful innovation engines. Through greater scale and diversity, we will deliver attractive and sustainable long-term cash flow and shareholder value.”

    “There is more content, and more ways to enjoy that content, than ever before,” said TiVo CEO David Shull. “In a rapidly expanding and fragmenting digital universe, consumers want and need to be able to easily find and enjoy the content that matters to them. TiVo has always been the company that brings entertainment together. Now, we can significantly expand our mission. With Xperi’s annual licensing of more than 100 million connected TV units, and complementary relationships with major content providers, consumer electronics manufacturers, and automotive OEMs, our combined company will transform the home, car, and mobile entertainment experience for the consumer.”

    Long-Term Vision and Value Creation

    The first step in the combined company’s value creation plan will focus on integrating the companies’ respective product and IP licensing businesses. Together, the companies expect to benefit from a larger and stronger platform to drive growth and innovation, accelerate time-to-market, and improve IP licensing monetisation and outcomes. The product business expects to pursue substantial cross-selling opportunities especially in its home and automotive markets.

    The new company had $1.09 billion in TiVo revenue and Xperi billings and more than $250 million in operating cash flow on a pro forma basis for the twelve months ended 30 September, 2019. The combined company expects to deliver revenue synergies by bringing new, innovative solutions to consumer electronics and automotive companies to help address the massive shift in media and entertainment distribution and consumption.

    Additionally, the companies expect to achieve at least $50 million of annualised run-rate cost savings by year-end 2021 through the integration of their respective product and IP licensing businesses, the majority of which are expected within the first twelve months after closing. These cost savings are incremental to those that are expected as a result of TiVo’s ongoing cost-transformation plan.

    In light of the business combination, TiVo has suspended its near-term plans to separate its product and IP businesses. Upon closing of the transaction, each company’s respective product and IP businesses will be integrated and operated as separate IP licensing and product business units. This will facilitate a potential separation of the combined businesses at a later date.

    Added David Shull: “TiVo’s management team and board have engaged in a comprehensive review of TiVo’s businesses over the past year, and we are confident that this combination with Xperi is the right path forward for all our stakeholders. While we previously planned to separate our product and IP licensing businesses in April 2020, we believe today’s combination with Xperi will enable us to create even more value for our shareholders in both the near and long term by allowing each to go to market with greater financial and operational scale.”

    Transaction Details

    Under the terms of the merger agreement, the shares of TiVo and Xperi stockholders will be converted into the shares of the new parent company based on a fixed exchange ratio of 0.455 Xperi share per existing TiVo share. Upon completion of the merger, Xperi stockholders will own approximately 46.5 share and TiVo stockholders will own approximately 53.5 share of the new parent company on a fully diluted basis.

    In connection with the transaction each company’s debt will be refinanced on a combined basis. To meet this objective, the companies have secured $1.1 billion of committed financing from Bank of America and Royal Bank of Canada.

    Management and Board of Directors

    Following the completion of the transaction, Xperi’s chief executive officer Jon Kirchner, will serve as chief executive officer of the new parent company and Xperi’s CFO, Robert Andersen, will serve as chief financial officer. TiVo’s chief executive officer, David Shull, will continue as a strategic advisor to ensure a successful integration.

    The board of directors of the new parent company will consist of seven directors, including Xperi CEO Jon Kirchner, in addition to three directors appointed by Xperi and three directors appointed by TiVo. The chair of the board will be selected by the independent directors of the board.

    The new parent company will assume the Xperi name but will continue to provide entertainment services under the TiVo brand, alongside Xperi’s premium DTS®, HD Radio®, and IMAX® Enhanced brands. The company will be headquartered in San Jose, California.

  • Convergence, consolidation & collaboration to fuel growth of cable, broadcast & OTT sectors

    Convergence, consolidation & collaboration to fuel growth of cable, broadcast & OTT sectors

    MUMBAI: In 2019, the Indian cable, broadcast and OTT industry witnessed many fundamental changes from digital dynamics to behavioural change of broadcasters moving from B2B to B2C model to industry stakeholders adjusting to the new tariff order (NTO). Indiantelevision.com’s VBS 2019 provided a platform to the industry experts to discuss and address the key issues faced them. Industry doyens revealed that convergence, consolidation and collaboration are the three 'C's to fuel the growth of the industry.

    VBS 2019’s panel discussions on ‘Transforming the sector to fuel growth’ included Elara Capital VP-research analyst Karan Taurani, Shemaroo Entertainment chief operating officer Kranti Gada, BBC Global News South Asia distribution head Sunil Joshi, PwC India partner and leader- media, entertainment Raman Kalra along with moderator SBICAP Securities equity research head Rajiv Sharma.

    Sharma set the tone of the discussion by briefing the audience on the major issues faced by the industry's stakeholders like cable, DTH, broadcasters, OTT, consumers and regulators in 2019.

    Kalra said, “We have been talking about convergence for a very long time and consolidation will keep on happening if we are willing to provide relevancy to the consumer. In the entertainment media space it is important to find a model which is relevant at scale. But how do you make relevant at scale? The relevancy for scale will trigger the consolidation because it leverages number on the financial statements and on the balance sheets of the company. It brings about so many synergies to the business models to run profitable, long term and sustainable business.”

    Taurani shared his view on consolidation in the cable space. He said, “Firstly it is important to highlight that business dynamics are changing completely. Broadcasters have been used to the B2B model since inception but now we are moving to B2C kind of a model. Basically everyone is well aware that if we really want to move to next level on digital, scalability is a very big factor and OTT platforms just offering about 10, 15, 20 movies will not help. So, to achieve that scale we need to invest in content. Apart from driving the partnership with other DTH cos or MSOs, achieving the scale on the digital part is needed. So I think it would take some more for them to understand the market and move to the next level.”

    Gada believes it is a great time for the media industry. With the emergence of OTT, the industry has added one and a half hours of screen time on digital front along with the television screen. Therefore the engagement of the end consumer with the content or with media or films has increased multifold.

    Gada says, “With deep-pocketed players cost goes haywire because short-term profitability is not their outlook, maybe their content is not their mainstay investment. It is sometimes just for consumer stickiness."

    Joshi said that convergence is the mantra of the day. “We have broadcasters, DTH, cable, OTT, consumers and a regulator who are the stakeholders of the value chain. If we look at post NTO and market dynamics, OTT is being discussed so widely because of its crispness and on-point approach to the consumers. Most of the broadcasters have direct consumer reach on their OTT to take care of and keep the stickiness on the linear also both compliments.”

    “Going forward, television needs to learn from OTT on what is been offered. So that on a quality level, both competes and at the operational level both collaborate. We have seen the collaboration of distribution platform and OTT because of their synergy and potential to exploit the potential consumers. Though they are competing at some level they are collaborating as well,” added Joshi.

    The panellists also elaborated on the digital monetisation model. They believe that there are three ways to monetise on digital platforms. The first is the business model, second is consumer centricity and third is the experience. Consumer centricity focuses on investing in knowing consumers. The second point of experience focuses on delivering the right experience. With respect to the business model, one has to experiment with multiple business models.

    The panellists also dwelled on the importance of the subscription model as AVOD does not lead to profitability because of the delivery cost, customer acquisition cost etc.  

    Stating an example of TataSky's binge initiative, Gada urged MSOs to become digital distributors and come up with aggregated and discounted offering for the consumer and make it convenient for those who are struggling with five to eight OTT apps. Gada asked MSOs to apply similar principles they used to offer TV channels to come up with bouquets of digital channels.

    The panel also highlighted the surge in term of telcos spending towards OTT. The new emerging game-changers today are e-commerce, smart TV and VMC.

    Sixty per cent of the money on digital advertising spent between Facebook and Google network. But now that is changing and the share is moving more towards OTT. The panel discussion ended on a positive note expecting that share of digital advertising will be 20-30 per cent whereas video advertising will be 40 per cent plus.

  • VBS 2019: Broadcast industry dwells on TRAI consultation paper, NTO impact and way forward

    VBS 2019: Broadcast industry dwells on TRAI consultation paper, NTO impact and way forward

    MUMBAI: The new consultation paper on broadcast tariffs is only seeking to address some infirmities in the earlier New Tariff Order (NTO) and will not bring any fundamental changes to the regulatory framework, said TRAI advisor Arvind Kumar at VBS 2019. His comment hinted that there might be some changes in the regulatory framework, which will bring NTO 2.0.

    The first panel discussion at VBS 2019 organised by Indiantelevision.com and its production division ITV2.0 focused on ‘NTO-The future roadmap.’

    The panel was moderated by Elara Capital VP- research analyst (media) Karan Taurani among the panelists IndiaCast Media Distribution president Amit Arora, Star India Distribution and international business president and head Gurjeev Singh Kapoor, Metro Cast Network India promoter Nagesh Narayandas Chhabria, The Remediation Company founder & partner Shyamala Venkatachalam, IndusInd Media & Communications chief executive officer Vynsley Fernandes and GTPL Hathway vice-president Yatin Gupta.

    The objective of the NTO was to bring transparency, freedom of choice, level playing field in the industry and rationalising the consumers’ cost. The panelists agreed that the dust of the new tariff order has settled down but the NTO 2.0 period might impact pricing again. With the new consultation paper Gupta expected that there would be price capping on bouquets and a la carte.

    Said Kapoor: “Very fairly the NTO has allowed consumers to exercise the power of choice. For DPOs the level playing field has come out very clearly. For the first time broadcasters were allowed to go with their understanding on pricing and packaging. We collaborated with all the stakeholders and ensured that smooth transition of the NTO happens. It wouldn't have been possible without the entire ecosystem coming together. I appreciate that MSOs and LCOs came together and were able to manage this really well. Post NTO has been good learning and deep understanding from Star’s perspective.

    Whereas Arora said, “NTO has brought us closures as partners. There have been cases where platforms had designed packages and shown them to us for feedback. We don’t have the expertise of forming packages but we understand consumers as well as the retail price, which is feasible for my market. I don't understand the concept that the consumer has to pay less. I believe the consumers pay for value and content. As we move forward the challenge is going to be how do we make consumers pay more revenue for the content he/she watches. It’s between me and the platform to work together on how do we get him to buy."

    National MSO GTPL Hathway’s Gupta said, “Any industry is always resistant to changes especially if it's technology based. One important thing is how do regulators ensure that it benefits the consumers but not at the cost of industry. There has been a lot of effort that went into building the new regulatory framework. As we see in the past few months, industry has begun to settle down and it's about to grow again. Looking at the tectonic shift, the cable industry is not just here to stay but to grow.”

    “Most of the LCOs have settled down and they have adopted the new structure. They have been able to maintain and grow their business. Over the period of time various MSOs and various platforms have taken different views,” said Fernandes.

    Taurani opined that 60 to 70 per cent of subscribers who cut the cord on cable TV have moved to DTH. It was an important change that has been observed. This was due to various reasons: MSOs not being able to implement the NTO in effective ways, delays on the MSOs’ front in coordination, etc.

    On the same Venkatachalam commented, “On the DTH side, they already had established backend systems, the NTO just gave them a jump to make the transition process even easier. For the MSOs, it took them some time to put all the things in place.”

    The panelists also shared their perspective on norms of 15 per cent capping on bouquet and FTA channels moving behind a pay wall and their expectations from the consultation paper released by TRAI to review NTO.

    Gupta said, “With NTO 2.0 we are expecting the price capping of a la carte. The discounts being offered today range from 10 per cent to 70 per cent, so there should be some capping on that which can help consumers to make intelligent choices."

    Agreeing with Gupta’s comment, Venkatachalam said that NTO 2.0 will impact the pricing.

  • VBS 2019: Industry stalwarts discuss NTO second phase issues

    VBS 2019: Industry stalwarts discuss NTO second phase issues

    MUMBAI: The sixteenth edition of the Video and Broadband Summit (VBS) organised by Indiantelevision.com has brought together industry doyens under one roof to discuss and understand the impact of the new tariff order (NTO) on the television broadcasting and distribution sector. VBS 2019 marked the presence of leaders from DTH, cable and broadband, broadcast, regulatory bodies and technology segments to discuss the state of the industry, key issues and finding solutions.

    Indiantelevision.com CEO, founder and editor-in-chief set the tone for the day with his welcome speech. "It is the best time for TV industry today. We are in the midst of uncertain times but uncertain times bring a lot of opportunities to build the business and explore the new way of building the cable-TV industry." He also emphasised on initiating a discussion on best practices, case studies on better execution and way forward towards a healthy television ecosystem.  

    The one-day conference began with a special address by TRAI advisor Arvind Kumar. He briefed the audience on the reason behind releasing the consultation paper to review NTO within few months of the regulatory framework. He informed that the consultation paper is only to address some infirmities in the NTO and will not bring any fundamental changes to the regulatory framework.

    “Broadcasters should rest assured that the new consultation paper will not seek to decide their channel prices. The only objective of the new consultation paper is to open a debate on how the NTO is impacting the industry and to address some of the infirmities in the NTO. The main objective of the industry was transparency and to create a level-playing field for everyone. NTO has empowered the consumer by giving him choice,” he said.

    In a fireside chat with Anil Wanvari, JioFiber president Anuj Jain elaborated on the company's plan and partnership.  He says, "Cable is a global technology and our intent is not to bring disruption in the market but add value to the industry. We have to see that television and OTT complement each other and the value that we bring is broadband. With broadband, we bring OTT content and voice services. There is enough space for everyone, there is nothing called overlap. "

    The session was followed by BARC India’s presentation on ‘TV viewership trends-post NTO era’ by chief operating officer Romil Ramgarhia. 

    The first panel discussion of VBS 2019 focused on NTO-The future roadmap. The panel was moderated by Elara Capital VP- research analyst (media) Karan Taurani with panellists IndiaCast Media Distribution president Amit Arora, Star India Distribution distribution and international business president and head Gurjeev Singh Kapoor, Metro Cast Network India promoter Nagesh Narayandas Chhabria, The Remediation Company founder & partner Shyamala Venkatachalam ; IndusInd Media & Communications chief executive officer Vynsley Fernandes and GTPL Hathway vice president Yatin Gupta.

    The objective of the NTO was to bring transparency, freedom of choice and level playing field in the industry. The panellists shared their perspective on the impact of NTO on the media and entertainment ecosystem, pricing, bouquet and ala carte price, and recently released consultation paper to review NTO.  The panellists agreed that the dust of new tariff order has settled down but the NTO 2.0 period might impact pricing again. With the new consultation paper, Gupta expects that there would be price capping on bouquets and ala carte. 

    The next panel discussion highlighted the advertisers’ take on the dynamic pay-TV landscape and how AdEX is likely to fare going forward with more changes anticipated to NTO. The panel ‘The Advertisers’ View’ was moderated by Anil Wanvari. ITC Ltd head media and PR Jaikishin Chhaproo, Havas Media Group West & South managing partner Kunal Jamuar, Godrej Consumer Products VP and head media services Subha Sreenivasan Iyer and Madison Media vice president Vandana Ramkrishna were the panellists.

    After that, Broadpeak business development manager Hervé Creff gave a presentation on ‘Keeping control of HDMI1 with Android TV operator Teir – the ‘super – aggregator’ approach’.

    The first half of VBS 2019 successfully ended with a panel discussion on ‘Transforming the sector to fuel growth’. Elara Capital VP research analyst (media) Karan Taurani, Shemaroo Entertainment chief operating officer Kranti Gada, BBC Global News South Asia distribution head Sunil Joshi and PwC India media, entertainment and sports advisory –partner and leader Raman Kalra were the panellists. The session was moderated by SBICAP Securities equity research head Rajiv Sharma.

    For more updates from post-lunch sessions stay tuned.